Margaret Jane Cryor Gaynor v. Frederick S. Hird, Jr

• Court: Court of Appeals of Virginia
• Decided: August 1, 1995
• Docket: 0927944
• Status: Unpublished

Opinion

COURT OF APPEALS OF VIRGINIA

Present: Judge Fitzpatrick, Senior Judges Cole and Duff

MARGARET JANE CRYOR GAYNOR

v. Record No. 0927-94-4 MEMORANDUM OPINION * BY JUDGE JOHANNA L. FITZPATRICK FREDERICK SYLVESTER HIRD, JR. AUGUST 1, 1995

FROM THE CIRCUIT COURT OF ARLINGTON COUNTY Paul F. Sheridan, Judge

Edward V. O'Connor, Jr. (The Lewis Law Firm, on briefs), for appellant. William B. Cummings (William B. Cummings, P.C., on brief), for appellee.

In this domestic appeal, Margaret Jane Cryor Gaynor (wife)

appeals the trial court's determination of the monetary award.

For the reasons that follow, we reverse the award and remand this

matter for further proceedings. MONETARY AWARD

"[T]he amount of any monetary award, subject to the

enumerated statutory factors, is within the sound discretion of

the trial court." Dietz v. Dietz, 17 Va. App. 203, 216, 436

S.E.2d 463, 471 (1993) (citing Amburn v. Amburn, 13 Va. App. 661,

666, 414 S.E.2d 847, 850 (1992)). (1) The Marital Residence

In the initial equitable distribution order of October 29,

1986, the court found the "interests of the parties in the

* Pursuant to Code § 17-116.010 this opinion is not designated for publication. marital residence . . . to be in proportion to their

contributions" and allocated seventy-five percent to Frederick

Sylvester Hird, Jr. (husband) and twenty-five percent to wife.

After a partition proceeding on November 13, 1991, the trial

court assigned the marital home to husband and ordered him to pay

wife for her one-half interest in the residence. The court also

suggested that $140,000 of the payment should be held in escrow

to provide for any offsetting award to recognize the equitable

interest of wife in the property. In a January 7, 1992 consent

order, wife agreed to an escrow of $130,000 as a condition of the

partition conveyance. In the April 19, 1994 equitable

distribution order, the trial court determined that it had the

"power to make an equitable distribution where partition is

involved" and that it was not required to divide the proceeds of

the property fifty-fifty. The trial court found that "[t]he

payment required in partition for a one-half legal interest was

$173,841.05. The offsetting award payable to Mr. Hird for a one-

quarter equitable interest is $86,920.52, payable from the

escrow." Wife argues that the trial court erred in allocating

seventy-five percent of the property's value to husband and

twenty-five percent to her. Wife asserts that the trial court

was required to base its calculation of the monetary award on the

parties' equal legal interests in the home as a result of the

partition. We disagree.

- 2 - Under the version of Code § 20-107.3(C) applicable to this

case, "partition . . . is no different than that permitted prior

to the adoption of Code § 20-107.3, except that it may now be

done as a part of the divorce proceeding rather than as a

separate proceeding." Morris v. Morris, 3 Va. App. 303, 310, 349

S.E.2d 661, 665 (1986). The partitioned property or its proceeds must be divided in a manner that will insure that each owner receives the amount of money or property to which his interest in the property entitles him. However, the value of this property still remains a consideration in determining the amount of a monetary award.

Id. (emphasis added) (citations omitted).

After the partition proceeding in this case, each party

received a one-half legal interest in the home, and the trial

court correctly ordered the husband to pay the wife for her one-

half interest when it assigned the home to him. However, because

the home was marital property, wife's proceeds from the partition

of the home, as well as husband's interest in the home,

constituted marital property subject to consideration in

determining the monetary award. Although wife was entitled to a

one-half legal share of the marital home, the trial judge found that she was not entitled to a one-half equitable share of the

marital estate based on his consideration of the factors in Code

§ 20-107.3(E). We hold that no abuse of discretion occurred

because wife was not entitled to an automatic one-half equitable

share of the marital home. See Papuchis v. Papuchis, 2 Va. App.

- 3 - 130, 132, 341 S.E.2d 829, 830 (1986) (holding that there is no

statutory presumption of equal distribution of marital property).

(2) Law Firm Capital Account

The trial court found that husband's law firm capital

account was marital property and had a value of $6,500 at the

date of marriage and $22,800 at the date of the divorce. Thus,

the account increased $16,300 during the marriage. This increase

was financed by husband's separate loan of $13,000, and the trial

court accordingly held that the loan could be used as an offset

against the increase in value. For equitable distribution

purposes, the trial court valued the account at the date of

divorce rather than at the date of the remand hearing. Wife

argues that the trial court should have used husband's 1988

partnership Form K-1 as evidence of the increase in capital. "We have stressed that the trial judge in evaluating marital

property should select a valuation 'that will provide the Court

with the most current and accurate information available which

avoids inequitable results.'" Gaynor v. Hird, 11 Va. App. 588,

593, 400 S.E.2d 788, 790-91 (1991) (emphasis added) (quoting

Mitchell v. Mitchell, 4 Va. App. 113, 118, 355 S.E.2d 18, 21

(1987)). "We recognize, however, that this date [of remand] may

not always be the most appropriate since both fortuitous or

intentional events can drastically affect values and equities

between date of classification and valuation, and courts should

- 4 - have the discretion to adopt a different date if the equities of

the case demand it." Price v. Price, 4 Va. App. 224, 232, 355

S.E.2d 905, 910 (1987).

In this case, the trial court did not abuse its discretion

in determining the value of the law firm capital account as of

the date of divorce. The record established that any increase in

the value of the account after the date of divorce was solely due

to husband's contributions to the account. (3) Interest on the Promissory Note

The trial court found that a May 15, 1981 promissory note

from husband to wife was marital property. The court valued the

note as of the date of divorce and included interest that accrued

during the marriage in the value of the note. The face value of

the note was $3,452.53, and the total value of the note, with the

accrued interest of $1,780.24, was $5,232.77. Wife contends that

the value of the note should include interest that accrued after

the date of divorce.

Unlike the law firm capital account, no equitable reason

justifies the trial court's use of the date of the divorce to

determine the amount of interest that was marital and should be

considered. The interest on the promissory note accumulated

without any effort on the part of either party, and thus, the

trial court erred in including only the interest that accrued

during the marriage. (4) Joint Bank Accounts

- 5 - In the April 19, 1994 order, the trial court awarded two

joint bank accounts totaling $614.69 to husband and did not

consider the value of the accounts in determining the monetary

award. The trial judge held that: Mrs. Gaynor contends that she is entitled to one-half of these accounts, but she gives no reason, and again there is no automatic one-half share in Virginia. The accounts have been paid to Mr. Hird, and no further award is required.

Wife contends that the trial court erred in failing to include

the joint bank accounts in its monetary award. See Gaynor v.

Hird, Record No. 1393-86-4, October 4, 1988. The jointly-held

accounts were marital property, and wife had a legal interest in

the accounts. Therefore, even though husband was previously

awarded the accounts and may have withdrawn the money from the

accounts, the court was not free to disregard their value in

calculating the monetary award. (5) Marital Debts

The trial court found that the total amount of marital debts

was $45,657, with $36,457 in both parties' names and $9,000 in

the name of husband alone. The court apportioned one-half of the

marital debts to each party, and wife argues that this was error.

We agree. Under the version of Code § 20-107.3 in effect when

the suit was filed, the court had no authority to apportion and

order payment of various marital debts. See Gaynor v. Hird, 11

Va. App. at 591, 400 S.E.2d at 789 (holding that "the statute

existing upon the filing of the bill of complaint controls the

- 6 - disposition of jointly held marital property"). While the court

had previously identified the marital debts and which party was

liable for their payment, it had not, until the decree on appeal,

attempted to apportion or order their payment.

(6) Interest on Miscellaneous Personal Property and Expenses

The trial court divided the parties' personal property and

awarded husband fifty-five percent of the property and wife

forty-five percent. 1 Husband held some items of personal

property, and the court determined that wife owed him $3,891.83,

fifty-five percent of the assets less the value of those assets

titled to husband. The court also found that the parties were

indebted to each other for certain expenses and that wife owed

husband $834 net expenses. Upon husband's request, the trial

court awarded husband interest on the personal property and

expenses retroactive to October 1986 because wife had not yet

paid the amounts due. Wife asserts that former Code § 20-107.3

did not classify a monetary award as a judgment, and thus no

interest could be awarded.

Prejudgment interest is usually not allowed on an

unliquidated, disputed claim. Skretvedt v. Kouri, 248 Va. 26,

36, 445 S.E.2d 481, 487 (1994). Whether interest should be

1 Wife also argues that the trial court erred in dividing the personal property fifty-five/forty-five. This argument is without merit because the division of the property was in the sound discretion of the trial court.

- 7 - awarded, and from what date interest should run, are decisions

within the sound discretion of the trial court. Code § 8.01-382;

Marks v. Sanzo, 231 Va. 350, 356, 345 S.E.2d 263, 267 (1986). An

award of prejudgment interest serves to compensate a party

receiving a judgment "for the loss sustained by not receiving the

amount to which he was entitled at the time he was entitled to

receive it," and may be "considered necessary to place the

[plaintiff] in the position he would have occupied if the party

in default had fulfilled his obligated duty." Id. (quoting

Employer-Teamsters, Etc. v. Weatherall Concrete, 468 F. Supp.

1167, 1171 (1979)).

In this case, the trial court erred in awarding interest on

the personal property and expenses. The record demonstrates

that, although the parties may have been in agreement about the

division and value of the personal property, they continued to

dispute the monetary award. In this equitable distribution

proceeding, the court was required to consider all of the marital

property in fashioning one monetary award. Although a court may

properly evaluate each item of property separately, the final

result is a monetary award based on the aggregation of all of the

marital property and consideration of all of the factors.

Therefore, the amount that equalized the division of the marital

personal property was not a separately due and payable award, and

it was error to treat it as such.

Additionally, the version of Code § 20-107.3(D) in effect

- 8 - when this case was filed does not provide that a monetary award

is a judgment and that the interest of provisions of Code

§ 8.01-382 apply. (7) Imputed Rent

The trial court found that wife's right to rent was "limited

to the [twenty-five] percent share representing her contribution

or investment, for purposes of both the equitable distribution

proceeding and the accounting." Wife argues that her share of

the rent is separate property, not subject to equitable

distribution. We agree. See Dietz, 17 Va. App. at 210, 436

S.E.2d at 468 (holding that property acquired after separation is

not acquired during the marriage and is not marital property

unless obtained with marital funds). ENTRY OF THE ORDER

Wife argues that the entire order is void under Rule 1:13.

We hold that the requirements of Rule 1:13 were satisfied because

wife was provided written notice of the presentation of the

orders and copies of the orders four months before their entry.

Accordingly, the decision of the trial court is reversed and

the matter remanded for further proceedings consistent with this

opinion. Affirmed in part, reversed in part, and remanded.

- 9 -